Production function estimation in Stata using the Ackerberg–Caves–Frazer method
Miguel Manjón
Research Centre on Industrial and Public Economics
Department of Economics
Rovira i Virgili University
Reus, Spain
[email protected]
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Juan Mañez
Department of Applied Economics II and
Estructura de Recerca Interdisciplinar Comportament Econòmic i Social
Universitat de València
València, Spain
[email protected]
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Abstract. We present a new e-class command, acfest, that implements the method of
Ackerberg, Caves, and Frazer (2015, Econometrica 83: 2411–2451) to
estimate production functions. This method deals with the functional dependence
problems that may arise in the methods proposed by Olley and Pakes (1996,
Econometrica 64: 1263–1297) and, particularly, Levinsohn and
Petrin (2003, Review of Economic Studies 70: 317–341) (implemented
in Stata by Yasar, Raciborski, and Poi [2008, Stata Journal 8:
221–231] and Petrin, Poi, and Levinsohn [2004, Stata Journal 4:
113–123], respectively). In particular, the acfest command yields
(nonlinear, robust) generalized method of moments estimates using a Mata
function and two specification tests (Wald and Sargan–Hansen). After
estimation, predict provides the estimated productivity of the firms in
the sample.
View all articles by these authors:
Miguel Manjón, Juan Mañez
View all articles with these keywords:
acfest, endogeneity, generalized method of moments, levpet, opreg, production functions
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